New Zealand’s S&P/NZX 50 index fell for a fourth session as US President Donald Trump’s latest trade broadside sent a chill through global markets.
Gentrack extended its decline amid reports Octopus Energy plans to spin out technology arm Kraken Technologies, as it led the local market lower.
Meanwhile, ikeGPS and Black Pearl Group were both among the stronger performers outside the benchmark as the former’s placement was oversubscribed and the latter announced a new acquisition.
And on the data front, the BNZ-BusinessNZ performance of services index showed the sector’s activity shrank at a slower pace last month, while Statistics New Zealand’s latest update on credit and debit card spending was stronger than predicted.
Back to school
The NZX50 fell 7.99 points, or 0.1%, to 12,678.69, with 20 stocks declining, 24 gaining, and six unchanged. Turnover was a relatively quiet $92.4 million, with offices returning to normal as school holidays ended.
Stock markets across Asia were mixed after US President Donald Trump’s latest broadside against various trading partners over the weekend, with neighbours Mexico and Canada facing tariffs of 30% and 35% respectively. The European Union is refraining from retaliating to its upcoming 30% import levy as it tries to reach a deal with the world’s biggest economy.
Chinese trade figures were stronger than expected, with exports up 5.8% in June from a year earlier, while imports marked their first month of growth so far this year.
That helped buoy mining stocks across the Tasman, with the S&P/ASX 200 index up 0.1% in late trading, although infant formula exporter a2 Milk Co – whose fortunes are tied closely to Chinese demand – fell 1.1% to $7.89 and Fonterra Shareholders’ Fund units declined 0.5% to $6.58.
Release the kraken
Gentrack fell to a three-week low, ending the day down 4.5% at $11.97 and extending its decline for a third day. Utilities software firm Kraken has been capturing international headlines over the past week with Octopus Energy’s planned demerger of its technology platform in the coming year. ASX-listed Origin Energy, which owns 23% of Kraken, has gained 8.9% so far this month.
Among blue-chip companies weighing on the NZX50, Infratil slipped 1.1% to $10.78, and Ebos Group decreased 0.5% to $40, while Auckland International Airport declined 0.8% to $7.41 on a volume of 1.8 million shares, the most heavily traded stock on the day.
Vulcan Steel posted the biggest gain on the NZX50, up 3.2% at $7.40, while insurer Tower increased 2.6% to $1.59 and Spark New Zealand rose 1.8% to $2.56.
Retailers advanced after Stats NZ figures showed retail spending on credit and debit cards rose 0.5% in June, beating expectations. Briscoe Group rose 2.7% to $2.65, while Hallenstein Glasson Holdings gained 0.5% to $8.74.
“While this is an encouraging sign for economic activity, it does need to be taken with a grain of salt,” Westpac NZ senior economist Satish Ranchhod said in a note. “Much of the rise in spending over the past month was related to increased spending on groceries, and in part that will reflect the large price increases for items like butter.”
Decisions, decisions
Channel Infrastructure gained 0.9% to $2.20 after the import terminal moved into the next phase of development work for a potential biorefinery at Marsden Point. A final investment decision is expected next year.
Meanwhile, the BNZ-BusinessNZ PSI showed services activity shrank for a fifth month in June, albeit at a slower pace than in May.
Doug Steel, an economist at BNZ, said the activity gauge showed conditions are improving, but that the soft readings for services and manufacturing support lower interest rates.
“The timeline for New Zealand’s long-awaited economic recovery just keeps getting pushed further and further out,” Steel said.
The kiwi dollar fell to 59.81 US cents at 5pm in Auckland from 60.18 cents at 7am and 60.16 cents last week.
Outside the benchmark index, ikeGPS climbed 8.6% to $1.01 after its A$18 million placement to institutions was oversubscribed, bringing on new Australian investors to the firm’s register.
And Black Pearl gained 7.1% to $1.21 after the software company signed a conditional agreement to buy US AI sales automation firm B2B Rocket for US$4 million in cash and 1.7 million shares, with potential earnouts of another US$8 million in cash and shares.
Reporting by Paul McBeth. Image from Markus Winkler on Unsplash.
